ChromaDex Corporation (CDXC), a leader in the development of Nicotinamide Riboside (NR) and other NAD+ precursors, has reported a year-over-year revenue increase of 12% to $22.7 million for the second quarter of 2024. The company has also announced the successful launch of its Niagen Plus product line and plans to enhance its market presence through various strategic partnerships and product expansions. With a positive adjusted EBITDA of $1.6 million and a strong cash position, ChromaDex remains debt-free and is optimistic about maintaining positive cash flow and achieving stronger growth in 2025.
Key Takeaways
- ChromaDex's Q2 2024 revenue rose to $22.7 million, marking a 12% increase year-over-year.
- The company launched Niagen Plus, Niagen IV, and injections, and introduced a Niagen Plus NAD test kit.
- Clinical studies showed benefits of NR supplementation for peripheral artery disease and brain NAD levels.
- E-commerce sales were stable at $13 million for the quarter.
- ChromaDex revised its 2024 outlook to anticipate a 10-15% year-over-year growth.
- The company is focused on expanding the market for NAD IV and is optimistic about the potential for Niagen products in the GLP-1 market and among Parkinson's patients.
Company Outlook
- ChromaDex plans to build momentum towards stronger growth in 2025 while maintaining positive cash flow.
- They revised their 2024 outlook to expect a 10-15% year-over-year growth and a reduction in general and administrative expenses.
- The company aims to expand the Niagen product line and increase market presence through partnerships and product expansions.
Bearish Highlights
- The company faces obstacles in explaining the science behind Niagen Plus and a limited supply, with a larger batch expected in October.
- The existing NAD market has not been growing, presenting a challenge for new product adoption.
- Blue Hat approval in China remains a challenge.
Bullish Highlights
- Strategic partnerships with Watsons, Nestle Health Science, and Pure Encapsulations are expected to enhance brand awareness and market penetration.
- B2B sales increased by 44% due to aggressive marketing by a customer on Amazon (NASDAQ:AMZN).
- There is potential for Niagen IV to gain popularity in the GLP-1 market and among Parkinson's patients.
Misses
- A near breakeven net loss of $15,000 was reported for the quarter.
- The exact impact of the rollout of Niagen IV on overall gross margins is yet to be specified.
Q&A Highlights
- CEO Rob Fried discussed the superior uptake of Niagen Plus compared to NAD IV and NMN.
- ChromaDex prioritizes human trials for AT over Cockayne due to ease of approval.
- Plans to introduce Niagen as an injection and eventually as an at-home product.
- The company is cautiously optimistic about the outcome of the Parkinson's disease study, which could lead to a significant commercial opportunity.
ChromaDex's Q2 earnings call revealed a company in the midst of growth and expansion, with a clear focus on innovation and market development. The introduction of new Niagen products and strategic partnerships are expected to contribute to the company's future success. Despite some challenges, ChromaDex's commitment to product excellence and consumer education positions it well within the NAD boosting industry. Investors and stakeholders will be watching closely as the company works towards achieving its revised growth outlook for the remainder of 2024.
InvestingPro Insights
ChromaDex Corporation's (CDXC) latest financials and strategic moves reflect a company that is navigating its growth with a keen eye on innovation and market expansion. To provide further context to the company's performance and outlook, here are insights based on real-time data from InvestingPro and InvestingPro Tips:
InvestingPro Data highlights ChromaDex's market capitalization at $216.52 million, illustrating its size within the industry. While the company's P/E Ratio stands at a negative -157.22, indicating it is not currently profitable, it's worth noting that the company's gross profit margin for the last twelve months as of Q1 2024 is a strong 60.98%. This suggests that while the company is not yet turning a net profit, it is effectively managing its cost of goods sold and generating a healthy gross profit from its revenues.
Moreover, the company's stock price has experienced a large uptick over the last six months, with a price total return of 73.03%. This could be indicative of positive investor sentiment and market response to the company's strategic initiatives and product launches.
InvestingPro Tips for CDXC reveal that the company holds more cash than debt on its balance sheet, which is a positive sign of financial stability and may provide the flexibility to invest in future growth opportunities. This aligns with the company's reported strong cash position in the article. Additionally, the company does not pay a dividend to shareholders, which is not uncommon for growth-focused companies that prefer to reinvest earnings back into the business.
For investors looking for more in-depth analysis, InvestingPro offers additional tips on ChromaDex, including insights into the company's liquidity, profitability, and stock price volatility. There are a total of 9 InvestingPro Tips available for CDXC, which can be explored for a comprehensive understanding of the company's financial health and market position.
The insights provided here are intended to help readers and potential investors make informed decisions by considering ChromaDex's financial metrics and market performance alongside the developments reported in the article.
Full transcript - Chromadex Corp (NASDAQ:CDXC) Q3 2024:
Operator: Ladies and gentlemen, thank you for standing by, and welcome to ChromaDex Corporation's Second Quarter of 2024 Earnings Conference Call. My name is Dustin, and I will be the conference operator today. At this time all participants’ are in a listen-only mode. And as a reminder, this conference call is being recorded. This afternoon, ChromaDex issued a news release announcing the company's financial results for the second quarter of 2024. If you have not reviewed this information, both are available within the Investor Relations section of ChromaDex's website at www.chromadex.com. I would now like to turn the conference call over to Ben Shamsian, Vice President of Lytham Partners. Please go ahead, Mr. Shamsian.
Ben Shamsian: Thank you, and good afternoon, and welcome to ChromaDex Corporation's second quarter of 2024 results investor call. With us today are ChromaDex's Chief Executive Officer, Rob Fried; Interim Chief Financial Officer, James Lee; Senior Vice President of Scientific and Regulatory Affairs, Dr. Andrew Shao; and Vice President of Finance, Leslie Yu. Dr. Shao and Mr. Yu will join the call for Q&A. Today's conference call may include forward-looking statements, including statements related to ChromaDex's research and development and clinical trial plans and the timing and results of set trials, the timing of future regulatory filings, the expansion of the sale of Niagen products and ingredients in new markets, business development opportunities, future financial results, cash needs, operating performance, investor interest and business prospects and opportunities, as well as anticipated results of operations. Forward-looking statements represent only the company's estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause ChromaDex's actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These risk factors include those contained in ChromaDex's quarterly report on Form 10-Q most recently filed with the SEC, including results of operations, financial condition, cash flows as well as global market and economic conditions on our business. Please note, the company assumes no obligation to update any forward-looking statements after the date of this conference call to conform with forward-looking statements actual results or to changes in its expectations. In addition, certain financial information presented in this call references non-GAAP financial measures. The company's earnings presentation and earnings press release which were issued this afternoon and are available on the company's website, present reconciliations to the appropriate GAAP measures. Finally, the conference call is being recorded via webcast. The webcast will be available at the Investor Relations section of our website at www.chromadex.com. With that, it's now my pleasure to turn the call over to our Chief Executive Officer, Rob Fried.
Rob Fried: Thank you, Ben. Good afternoon, everyone, and thank you for joining us today on our investor call. For the second quarter, we delivered another solid performance with $22.7 million revenue, a 12% increase year-over-year and an unexpected virtual breakeven net income, $15,000 net loss. We achieved $1.6 million in positive adjusted EBITDA, marking our fifth consecutive quarter of positive adjusted EBITDA. This reflects our steadfast focus on maintaining fiscal discipline across the company while still supporting upcoming launches and key initiatives. In the second quarter, we generated total positive cash flows and ended the quarter with $27.9 million in cash and no debt. As most of you know, ChromaDex is the gold standard in the NAD space, and we are at the forefront of improving the health of all individuals. After significant time and investment in research and development, I'm excited that our Niagen Plus product line launch is finally here. In June, we first introduced the Niagen Plus product line featuring pharmaceutical grade Niagen. U.S. FDA registered 503B outsourcing facilities will compound and distribute pharmaceutical grade Niagen, which will be available in intravenous IV and injectable forms exclusively at clinics with prescription. Starting this month, Niagen IV and injections will debut at select IV clinics through Wells pharmacy network, including cenogenix, drip hydration, REVIVE, Next Health, Restore Hyper Wellness and many others. This innovation not only opens significant growth opportunities for the company and a global market valued at over $2 billion, but also represents a major advancement in NAD Plus IV therapy, offering a superior tolerability, 75% shorter infusion time and a faster elevation of NAD blood levels post infusion. Over the last few years, we have seen the increasing popularity of NAD IV therapy among celebrities, athletes and influencers who seek to biohack the aging process. We know that users of traditional NAD IV therapies have reported very uncomfortable experiences and shared that it takes hours to administer. This is not the case with Niagen IV. We believe that Niagen IV will provide a superior experience for all consumers, and we are excited to bring the best NAD-boosting ingredient to IV therapies. We also announced the launch of the Niagen Plus NAD test kit available exclusively to health care practitioners to provide a reliable method for measuring patient, but NAD levels. Niagen NAD test kit allows health care practitioners, a tool to provide patients with personalized and effective protocols by more accurately tracking NAV changes over time. ChromaDex is the only company to offer our patented NR in both oral and injectable sterile formulations. We are indeed holding true to our commitment to developing new products and mechanisms to benefit the way at this beyond traditional dietary supplementation the team at ChromaDex is passionate about this constant stream of innovations and more to come. I am very proud of everyone here for their diligence and thoroughness throughout the development or the proper, safety, efficacy and compliance has been established. As I have said previously, the mission of ChromaDex is to improve health spend to as many lives as possible. In the past earnings call, I referenced the clinical study that investigated the safety benefits of long-term NAD supplementation in individuals with ataxia telangiectasia, a rare genetic neurodegenerative disorder. At is a rare progressive disease where children suffer from adverse effect of premature aging and face limited life expectancy. The results of the study were published in October 2023 and confirmed that long-term supplementation of NR was safe and well tolerated and includes the motor coordination, eye movement in AT patients of various ages. In June, we announced the U.S. FDA granted orphan drug designation and rare pediatric disease for NR as a candidate for treatment of AT. We plan to file an investigative new drug application with the FDA in anticipation of conducting human clinical trials guided by Dr. Vilhelm Bohr, Professor at University of Copenhagen and Scientific Adviser to ChromaDex. We eagerly anticipate the results from future research and how NR can bring therapeutic benefits to individuals suffering from AT. With regard to our Parkinson's initiative, just last week, a new patent was granted in Europe for the use of nicotinamide riboside in the treatment of Parkinson's disease. This is a very exciting step forward. We look forward to the results of the Phase III NO-PARK study, which is nearing completion. We anticipate the study to be complete sometime in the first-half of next year. The NO-PARK study aims to examine the therapeutic potential of NR in patients with Parkinson's disease, all of whom take either a placebo or a gram a day for a year of nicotinamide riboside. Since our last quarterly update, there have been a few key clinical publications that I'd like to highlight. In June, results of a pivotal Phase II trial were published in the Journal of Nature Communications. The study, led by Dr. Mary McDermott at Northwestern (NASDAQ:NWE) University revealed that six months of NR supplementation at 1,000 milligrams per day significantly improved the six minute walk distance and treadmill walking time in people with peripheral artery disease, or PAD. This compared to a placebo. PAD is a condition characterized by plaque buildup in peripheral arteries that restrict blood flow. It affects 200 million people worldwide. In July, a peer-reviewed clinical study was published demonstrating that a single dose of NR supplementation affects NAD levels in the brain. The study at the University of Pennsylvania examined the effect of supplementing 900 milligrams of NR offered to them as TRU Niagen in healthy adults and found that within four hours, brain NAD levels increased significantly by about 16%, compared to baseline. This study is the first to demonstrate an increase in brain NAD levels after just a single dose of TRU Niagen. And the results are consistent with previously published clinical evidence, demonstrating supplemental NR increases brain NAD levels. These recent findings are quite compelling as the brand relies heavily on NAD to support its extensive metabolic functioning. These publications add to our understanding of the many profound benefit in our supplementation can provide to all individuals. I'd like to give a brief update on the current core business. At $13 million for the second quarter, e-commerce continues to be our largest and most consistent source of revenue remaining stable year-over-year. Several factors play into our current position in e-commerce. First, as you all know, last year, we invested in a brand campaign through Amazon's homepage takeover. This drove a significant increase in new-to-brand purchases for the first quarter of 2023. Subsequently, in the second quarter of 2023, our team reduced top of the funnel spending, but we directed our efforts to retargeting consumers exposed to the homepage takeover event. In contrast, during the first two quarters of 2024, our marketing team focused on different initiatives. Moving away from heavy promotional periods and instead utilizing influencer marketing, refreshed content and social media presence to drive acquisitions and brand awareness. Absent the large-scale event like last year, we are seeing positive signs from our marketing efforts, including increases in subscriptions on Amazon and on our own website. Total Niagen-related sales on Amazon marketplaces have grown significantly year-over-year, reflecting increased consumer awareness that Niagen is the gold standard in NAD boosting supplementation. TRU Niagen as a brand continues to grow in Amazon and the presence of our other Niagen partners, including life extension, neuro hacker and Nestle's brand Solgar has furthered the recognition of Niagen's benefits without requiring significant marketing expenditure from us. Unfortunately, other brands have emerged on Amazon promoting NAD boosting products that do not live up to their claims. It is troubling that such misinformation and misleading practices continue to persist, but it only strengthens our resolve to emphasize Niagen's superior quality. As the popularity and awareness of NAD continues to grow, we will remain vigilant on our actions against infringers and against brands that continue to be disingenuous to consumers. We are dedicated to ensuring that Niagen remains recognized as the premier choice in the NAD boosting industry through our continued focus on product excellence and consumer education. Watsons remains a valued strategic partner providing steady recurring revenue with occasional quarterly fluctuations. We continue to explore new opportunities with Watsons to enhance brand awareness. One such initiative is the development of sample size package of 10 300-milligram doses of TRU Niagen. This smaller offering is intended for use in gift with purchase promotions or as a stand-alone product to attract new customers. Additionally, we are collaborating with Watsons on further marketing initiatives planned later this year and perhaps new product offerings as well. Nestle Health Science has made excellent progress in integrating Niagen into their brands. Earlier this year, Pure Encapsulations reformulated two of their existing SKUs to replace NMN with Niagen. Last month, Pure Encapsulations launched a new multi-ingredient product featuring Niagen called NR longevity. We are quite proud to collaborate with Nestle, working together to deliver products that enhance cellular health and support health span. As many of you know, Brianna Gerber stepped down as CFO in July. Brianna was an important business partner to me and to the rest of the organization. The leadership contributed to our progress towards cash flow breakeven and better. As she moves on to a new opportunity, we'd like to thank her for her contribution to ChromaDex, and we wish her the best of luck. While we search for a new CFO, we have promoted James Lee to the position of interim CFO. James has been with ChromaDex over 15-years and has over 20-years of public accounting experience at ChromaDex and Samsung Electronics (KS:005930). I have immense trust in James' capability and expertise and I am confident in his leadership during this transition. In the past quarter, we have made significant announcements around our upcoming launches and around our science. The commercialization of the Niagen IV took longer than we had originally anticipated. This may have implications on our overall growth plans for the balance of 2024. Over the last few years, we put tremendous time and effort in applying for the patents around Niagen IV to secure pharmaceutical grade Niagen to obtain 503B approval with the FDA and to conduct third-party independent studies to assess safety and efficacy. Accordingly, while we are still driving toward higher growth, we are introducing a range that contemplates the later launch of Niagen IV and contemplates factors not within our control that may impact our top line expectations. James will review the updated 2024 outlook in greater detail shortly, but we look to finish the rest of 2024 by building momentum towards stronger growth in 2025, while still maintaining positive cash flow through continued fiscal discipline. In summary, this quarter marks an important point for ChromaDex. The debut of Niagen will be transformative for ChromaDex with the NAD company. At the same time, we are continuing to focus on optimizing our e-commerce marketing strategy and our business partnerships to gather momentum to end the year in a strong position and we are eagerly anticipating our progress on Parkinson's and on Ataxia. I would now like to hand the call over to James to run through the quarter's financials and then on to Q&A and closing remarks. James?
James Lee: Thank you, Rob. It's a pleasure to address our investors, partners and team members today. I'm honored to step in as Interim CFO and I’m committed to upholding the operational efficiency and financial discipline that have been central to ChromaDex's success these past few years. The progress we've made on key initiatives is promising. And I'm excited about the opportunities ahead. As Rob said, we're diligently searching for a permanent CFO, who will guide us the space of our journey. In the meantime, I'm dedicated to leading the company through this transition and continuing to drive our strategic and financial goals forward. Moving to the key highlights of our second quarter performance. ChromaDex delivered total net sales of $22.7 million, solid gross margins of 60.2%, a reduction in overall operating expenses of $0.7 million and a near breakeven net loss of $15,000. Additionally, we had near breakeven operating cash flows and a positive $1.6 million of adjusted EBITDA, a non-GAAP metric. Our performance this quarter demonstrates our continued financial discipline across the organization, while making meaningful progress with key initiatives such as Niagen Plus. With that, let's turn to the second quarter financials in more detail. As noted, total net sales in the second quarter of 2024 reached $22.7 million, reflecting a 12% increase compared to the second quarter of 2023. This growth was primarily driven by a 10% increase in TRU Niagen sales with steady e-commerce performance year-over-year. And a 44% increase in combined Watsons and other B2B sales, partly due to timing of sales. As a quick reminder, in mid-March of the previous year, we invested in a brand-building event with the Amazon homepage takeover, which drove higher e-commerce sales during the second quarter of 2023. Even without a similar initiative this year, we maintained robust e-commerce performance. Regarding Watsons and other B2B sales, the timing of sales can vary for our partners on a quarterly basis. Nonetheless, we continue to see steady recurring demand from existing partners and have realized some modest upside. Additionally, total ingredient sales grew $0.6 million, partly driven by timing of sales from our partners. Gross margins remained strong at 60.2%, slightly down, compared to 60.8% in the second quarter of 2023. This modest decline is mainly due to changes in our business mix with e-commerce sales constituting 57% of our total net sales in the current quarter, compared to 64% in the prior year. Even with this shift, our margins continue to reflect strong operational efficiency and cost management. Selling and marketing expense as a percentage of net sales rose to 30.6%, compared to 29.6% in the second quarter of 2023. As discussed earlier, our investment in a major brand building event in the first quarter of the prior year, allowed us to retarget consumers effectively and achieve overall efficiencies in the second quarter of last year. This year, without a comparable campaign, we increased our marketing investments, but still managed to drive similar efficiencies, demonstrating our commitment to strategic growth and our ability to adapt our marketing approach to continue delivering strong results. Research and development expenses remained stable year-over-year as we continue to focus on advancing innovation and developing new NAD precursors. General and administrative expense decreased by $1.6 million, compared to the previous year. This reduction was largely due to lower costs in executive and administrative headcount, bad debt, severance and restructuring and royalty and commission expenses. For the second quarter of 2024, our operating loss was $0.3 million versus a $2.3 million loss in the second quarter of 2023, and an improvement of $2.1 million, driven by higher net sales and lower operating expense. The net loss attributable to common stockholders for the second quarter of 2024 was near breakeven or a loss of $0.00 per share, compared to a net loss of $2.2 million and a loss of $0.03 per share for the second quarter of 2023. Moving to the balance sheet and cash flow. Our balance sheet remains strong. We ended the quarter with $27.9 million in cash and no debt. For the six months ended June 30, 2024, net cash provided by operations was near breakeven at $31,000, compared to a $6.1 million cash inflow in the same period last year. The difference year-over-year was largely driven by changes in working capital with a relatively greater increase in trade receivables of $4.2 million, and a greater reduction in accounts payable of $2.5 million. As it relates to our 2024 full-year P&L outlook, detailed information on key financial metrics can be found in our earnings press release and accompanying slide presentation. As mentioned in the prior earnings call, our top line outlook included revenues from new product launches due to the longer-than-expected commercialization process of Niagen Plus, stemming from the necessary steps to ensure thorough diligence, we have revisited our outlook. While we continue to aim for higher growth, we now anticipate a 10% to 15% year-over-year growth, driven by our global e-commerce business, new and existing partnerships and the launch of Niagen IV. Our revised top line expectations account for the extended commercialization time line of Niagen and other factors beyond our control. We also revised our general and administrative expense outlook, which is now down approximately $1.5 million, a reduction from the previous increase of $1.5 million to $2.5 million. Initially, we provided the guidance that G&A was going to increase year-over-year due to investments in infrastructure to support our growth trajectory and new market launches. Given the later launch date of Niagen IV, we have shifted the timing for some of those initiatives into 2025. Beyond these adjustments, our key metrics remain consistent with last quarter's outlook. We expect strong and steady gross margins with a slight improvement over the prior year's 60.8%. We plan to make greater investments in sales and marketing expense, while maintaining similar efficiencies and increased research and development investments to support our strategic initiatives. In summary, we delivered a solid financial performance in the second quarter, both at the top and bottom lines. We advanced crucial aspects of our strategic plan, including the introduction of Niagen Plus, which opens up exciting new market opportunities. While unlocking the full revenue potential of the Niagen Plus launch may take time, we're seeing encouraging responses from our partners, and we're proud of the progress we have made. We will remain disciplined in managing the business at cash flow breakeven or better, while scaling our revenues and making key investments for growth. Our core business remains strong with continued positive operating cash flows and a healthy balance sheet. All of the achievements this quarter are a testament to the team here at ChromaDex. Their dedication and hard work in bringing these initiatives to fruition have been instrumental in driving us forward. As we continue to pursue our goals together, I am committed to maintaining the operational efficiency and financial discipline that have been key to our success. Operator, we're now ready to take questions.
Operator: Thank you. [Operator Instructions] And with that, we will begin the question-and-answer session. Your first question comes from the line of Mitch Pinheiro from Sturdivant. The line is open.
Mitch Pinheiro: Yes. Hey, good afternoon.
Rob Fried: Hi, Mitch.
Mitch Pinheiro: Hey, Rob and company, congratulations on all the sort of new products and initiatives that you've launched recently. I would -- let's take -- just like to take a look at if you could provide a little more color around Niagen Plus. Like how many clinics are we talking about right here, initial shipments. And just looking at the advantages that your product has over the current product set. Why wouldn't you expect adoption to be faster. Who wants three hour infusion times with pain. I mean why wouldn't you be able to capture 50 share right out of the gate. What are the obstacles that I'm missing on that?
Rob Fried: Thanks, Mitch. That's a very good question. We do think we'll get more than 50% share. Head to head the product is so significantly better than NAD IV. The reason why it's so much better than NAD IV is the same reason why it's so much better than NMN. Neither NAD nor NMN when consumed easily are taken up in the cells, neither one of them. NAD is a very large molecule and it has -- is a nucleotide. It has a phosphate on the perimeter. The same with NMN. It has a phosphate. It's that phosphate that blocks entry into the cell. In the case of NAD, they have the double whammy. They have the phosphate and extra-large molecule. That's the reason why when people sit down to ingest NAD infusion, it takes so long and there's so much nausea and stress and sweating, because it's unable to get into the cell. So what happens with both NAD and NMN is it tries creates friction and we believe, inflammation, but eventually breaks up into smaller molecules. One of the molecules it breaks up into is nicotinamide riboside, Niagen. Once that NR molecules flow through the bloodstream is quite easily upregulates into the cell. So that's why the test results are exactly what we expected. If you do an IV infusion of Niagen, it cleanly goes right up into the cell with no side effects and has dramatically increased level of NAD after. That's why NR is better than NMN. That's why it's better than NAD. This is a difficult message to communicate, but that's our quest. We've got the superior product explaining it to people is challenging. We know that once we explain the science to the clinics, they all know what the experience is with NAD. They say, "wow, you have something that only takes minutes instead of hours. It doesn't have side effects. When can I get it? So we know that the thing sells, they all want it. The problem has been the supply. Like everything that we do, Mitch, we do it very, very much by the book. It puts us at a disadvantage from some players who like to steal patents or make false claims or put things in bottles that are that are inaccurate. As you know, there have been two studies out there that showed that a very low percentage of the NMN bottles that are sold out there actually have NMN, let alone accurately label. But we went through the process. We worked on this thing for almost four years. We got the FDA to put it on the 503B list as an improved ingredient. And we applied for, we have patents pending on this process, delivery of NR and NAD precursors via this mechanism. But most importantly, it had to be pharmaceutical grade material. It's going right into the blood stream. And that has been a very long process. It's a completely different supply chain than the one we're using on the food grade material we sell as a dietary supplement. It's a different supply chain. It's different partners. Every step of the way has to be FDA approved. It's triple sterilized, triple validated, purified. The thing is perfect. In fact, our partner Wells Health, our compound pharmacy said, it tests better than any ingredient they've ever tested before. That's how pain is taking, we are and how slow it is. In August, we have a limited amount of ingredients. We only have a few kilos. Those kilos have already been sold. In October, we're going to get a much larger batch -- so that's the reason. It's not demand. It's not that they don't get it. And it's not that they don't want it. It's just been very, very challenging to do things the right way, and it's why it's taken us so long. We anticipated initially that we were going to have the product available at the beginning of this year, not October. And that's really the main reason why we're -- we had built it into the forecast for the year. That's why we are slightly lowering our forecast for the year, because we just don't know what's going to happen in October, November and December when we finally have the ingredient. So just to be safe, we created that slightly lower expectation. I know I answered a bunch of questions in one, but I knew those other questions were coming from you anyway Mitch.
Mitch Pinheiro: Yes. No, that was very helpful. Let me ask you this. And then so you're getting a larger batch in October I mean, when do you think you'll be at the point where you're fulfilling orders real time as opposed to like batching.
Rob Fried: October -- could you hear me, Mitch, on. No, lost the connection, I think, Yes. Can you hear me? This is Rob. Justin, are you still with us?
Operator: Yes, sir. I was about to announce our second question, if Mr. Pinheiro would not respond after that answer.
Rob Fried: Mitch, are you still on?
Operator: I have returned him to the queue and apologize. Our second question comes from Bill Dezellem from Titan. The line is open.
Rob Fried: Hi, Bill.
Bill Dezellem: Hello, Rob, I could hear your answer. And hopefully, Mitch will come back in. Those were good questions. So continuing on with that line of questioning. I think that you answered the question that Mitch kind of started with, which was -- what's the biggest hurdle to Niagen's adoption? And I believe you basically said availability of product. So if once you have full availability, then what do you see as the biggest hurdle to Niagen IV being adopted?
Rob Fried: That's an interesting question, because the demand is already there. I mean there is an NAD IV business out there already. We think we have the opportunity to expand that market dramatically. Because it is a fairly expensive consumer product. I think that's one answer. That's one limiting factor. But also because it's NAD IV is such an unpleasant experience, it's limited the broad adoption. Within Niagen IV and Niagen shots, Niagen injection has the opportunity to dramatically expand the market. So I think the challenge there would be just communicating that it's out there.
Bill Dezellem: All right. Thank you. And which I guess means that it's the clinics that ultimately will be doing the marketing to their local constituents?
Rob Fried: Well, we will be doing some marketing, but it's -- our customer is the pharmacy. The pharmacy sells to the clinics and the clinic sell to the consumer, but we will be doing broad marketing of Niagen IV, at both the clinic level and the consumer level.
Bill Dezellem: Okay. Thank you, Rob. And then maybe I should be asking this question slightly different than I was thinking, but I was going to ask what percent of the IV therapy market, due to partners that you've identified, do they represent? And when I say partners, in my mind, I was thinking clinics, but maybe the correct way to characterize it as pharmacy. So maybe you could help me ask the question the right way and then answer it. I guess, you get to do both sides of this.
Rob Fried: Well, there are many 503(b) and 503(a) compound pharmacies out there, the 503(b) pharmacy business generally exists, because of special situations where there's a unique critical need for an ingredient that may not have a specific drug approval for an indication, but is approved by the FDA to be offered through this channel through this means or if there's an example like Ozempic, for example, where the supply is not meeting the demand. So many of these 503(b) companies are actually selling these GLP-1 products, because the demand is so great that -- and other peptides, because the demand is so great that the drug companies can't make it in time to meet that demand. So NAD as a percentage of that market is really kind of a small percentage of that overall market. We think at the clinic level, at the consumer level, the NAD IV market in the U.S. is somewhere between $100 million and $150 million total. And so you split that with the pharmacy, then you split it again with the ingredient supplier, which is, in this case, would be ChromaDex. So that's how big we think that market is today. But we think we have an opportunity to expand that market because the product is so much superior to what's out there presently.
Bill Dezellem: And Rob, the clinics that you are in partnership with, what percentage of that $150 million at retail do they represent?
Rob Fried: More than 50%. The other 50% would be physicians that administer NAD, either via an injection or an IV in the actual physician's office, but the clinics or the majority of that business.
Bill Dezellem: Great. Thank you. That is helpful. A couple of other questions before I hop off, if I may. The first one is relative to AT. How is this process that you're going forward with AT different than the process that you had several years ago with Cockayne Syndrome?
Rob Fried: That's a good question. The Cockayne studies that were just mouse studies and be contemplated and actually Andrew's on the call, I'll give you a quick answer, and then I'll let Andrew chime in if you'd like, Andrew. The Cockayne study which is comparable in a way. It's also an orphan disease that's accelerated aging disease. And it was Will Bore, who's on our SAP and at the time was at NIH, who oversaw those Cockayne studies while at the NIH, and he, again, is overseeing these ataxia studies presently. They never -- we never did Cockayne studies that reached the human level. So they never got to the clinical level, whereas Ataxia did. We had that study published in October of last year, which I think is a Phase II human clinical study on Ataxia. So we thought that -- we thought there's a therapeutic benefit to both, but we thought ataxia was further along. Andrew, is there anything else you want to add to that?
Andrew Shao: Sure. Sure, Rob. I'll just add a little bit. Great question, Bill. The overall regulatory process is the same. And as Rob mentioned, Cockayne had never been explored in a human clinical study setting, whereas ataxia as you've heard from Rob's comments earlier, has been studied in a couple of trials most recently, a two year trial in a group of patients. So it's just further along as far as its investigation in humans. But the regulatory process going through FDA's office of Orphan disease and so forth is the same.
Bill Dezellem: And then the, I guess, business logic for going down the path with AT with human studies first versus Cockayne. Was that a decision that ChromaDex made? Or was that really tied to the -- to those who were doing the studies, the researchers, and you all really did not have a role in that?
Rob Fried: I'm sorry, could you ask that one more time?
Bill Dezellem: Yes. Did ChromaDex make the decision to go down the AT path in terms of human trials and to not be down -- okay. And why AT instead of Cockayne?
Rob Fried: Well, the way our CERP program works is usually companies come to us. And somebody came to us on both Cockayne and Ataxia, but we just thought Ataxia was either easier to get approval on, easier to get done, easier to get financed.
Bill Dezellem: Great. Okay. That's helpful. And then one additional question, please. The B2B sales being up 44%, congratulations. Does that represent a sell-through level? Or is that business still really dictated by lumpy orders depending on your consumers' needs. I just -- I don't have a lot of clarity if they're just ordering on a consistent basis now or more batch orders.
Rob Fried: So there's an interesting development that we alluded to in the -- in our parks. And that is that one of our ingredient customers this year began aggressively marketing a combination product of Niagen Plus another ingredient on Amazon and marketing it very heavily. And doing extremely well on Amazon. So we're in this interesting position where it sort of compete with our customer. So his sales have been extremely strong on Amazon and on his website. So he's been purchasing a lot of ingredients. And we think that's a really good thing, and it's obviously good for our top line and bottom line, but maybe had he not done that, our top line would be significantly higher. If you follow what I'm saying, but we think on balance, it's good for the health of Niagen overall in our company overall, and they're very effective marketers, and they advance the word on NAD and Niagen in particular. So because of that, that's why ingredient sales have gone up so significantly and why we expect them to continue to at least for the rest of the year.
Bill Dezellem: Great. That's an excellent problem to have. Thank you for all the time.
Operator: Thank you. Our next question comes from the line of Ram Selvaraju from H.C. Wainwright. The line is open.
Unidentified Analyst: Hey everyone, this is Mitchell on for Ram. A few from us. I wanted to know how you'll go about setting the pricing for Niagen IV? And what impact do you expect it to -- the rollout to have an overall gross margins? If you could just provide a little more color? I know you touched briefly on your expectations for margins changing. And then separately, how long do you expect it to take for NR to replace NMN in ex-U.S. markets in particular, in China? Thank you.
Rob Fried: So the way we priced it as we work backwards, we saw what the pricing was or is for NAD IV. We price ours slightly higher than that. And then worked our way back to the split with the clinics and with the compound pharmacies. The margins are higher than our corporate margin. So it should have a positive impact on our gross margins. As you know, NMN is illegal in the United States. The FDA has ruled on that numerous times. And all reputable companies have ceased selling NMN in the U.S., but there is a proliferation of it of increase many, many companies coming out there, building a website, selling NMN, taking advantage of awareness level that were mostly generated by a few podcasts and by a professor -- a Harvard professor. But since that has happened, and one of the things that we've shown and there are two studies to show it is that the vast majority of these NMN bottles are mislabeled and many have endotoxins present, meaning a real health issue. The endotoxin presence comes as a result of poor manufacturing processes. You have to realize that the FDA makes a decision that NMN cannot be sold. The companies that decide to keep selling it are the same companies that probably don't care much about from where they get it. The companies that are making it are also companies that have decided to keep making despite the FDA's decision, and that's why you're seeing the presence of endotoxins in many of these NMN products. It's a function of poor manufacturing processes. That type of approach has been very prevalent in China as well, mislabeling, presence of endotoxins, false claims and then of course the FDA's decision on NMN. So the Chinese government has decided that NMN is no longer legally sellable as a cross-border product in China. So NMN sales in Asia and China have dropped dramatically in the last year, very, very, very dramatically. It has not yet benefited us. And our partner, SinoPharm, believe that the reason it hasn't yet benefited us is because the average consumer seems to confuse TRU Niagen with NMN. They don't yet understand that we are different. But they are persistent about continuing to get that message across. The Chinese government has not issued anything negative on TRU Niagen nor will they because they're aware of the studies we've done and the way we go about doing our business. But it has not yet translated into a convergence of sales from NMN to Niagen or to TRU Niagen. We have added one or two additional partners I heard as a partner that we added, that's selling TRU Niagen globally, and soon we'll be selling in China, and they are doing well and growing. So we hope that between H&H, SinoPharm, iHerb and maybe one or two others, we'll start to see an increase in cross-border sales into China.
Unidentified Analyst: Great. Thank you so much.
Rob Fried: Sure.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Sean McGowan from ROTH MKM Partners. The line is open.
Sean McGowan: Thank you. Hi, Rob. Hi, James and other. I have a couple of questions, too. So regarding the shift in the timing, let's say, of the rollout of Niagen Plus, if we had a certain expectation for where you would be by, let's say, the middle of next year. Would this delay have an impact of that? Or is it -- you can catch up pretty quickly so you'll be basically where you expect it to be by the middle of next year. I would ask the same question regarding the spending associated with that.
Rob Fried: Yes. I think it will not expect -- it will not have an impact on where we expect to be in the middle of next year on either spending or on revenue.
Sean McGowan: Okay, that's very helpful. And when you say -- I think you said earlier that you would expect at some point, I needed to say when, but we get greater than 50% share of that market and then share what the current market is, but said you expect to expand it. So do you think that there's a lot of growth in the existing market? Or is are you basically going to be providing all of that growth?
Rob Fried: It's a new business for us. And many of us know what it's like to start a new business and get into a new business, and it's just the unknowable. You just don't know. So we want to be conservative about this. We just don't know what problems will emerge, but we've been at this for a long time. The early indications are, I would say, extremely positive. The clinics, we've given Niagen IV to many people at this point. Dozens of people have tried it, not just in the test, but at the clinics and various influencers and celebrities, and they've all validated what the test show and what we believe. So we're confident based on what we know. But until we're actually up and running and in the business and study, we don't know what we don't know. So we're being conservative with our projections. We are hopeful that it will expand the market. It seems very intuitive and logical that it might since it's a better product than what's on the market. It doesn't have the same side effects and is much quicker and elevates NAD higher, and you have all these clinics that know how to communicate it and have communicated. So it does seem intuitive that it would expand the market but we're not jumping to that conclusion yet.
Sean McGowan: Well, I guess the [Indiscernible] really to what I'm asking is, are you expecting -- like if you weren't entering the market, would you expect the existing market to exhibit strong growth? Or has it kind of flattened out and you're just going to take all the incremental sales? Yes, the existing NAD market, like the guy -- what's already out there before you went to the market? Is that a double-digit, triple-digit growth rate?
Rob Fried: Yes. So the existing NAD market, I know you know this, and I said it before and everybody does now, but I feel like it needs to be emphasized. We don't sell NAD. We sell Niagen, which is a precursor to NAD, but what it ultimately does is it elevates NAD. But if you just simply do NAD through infusion or oral, it just doesn't work and Niagen IV does work. The existing NAD IV and injection market has not actually been growing. It's been at this range of between $100 million and $150 million for two or three years now. The reason why it hasn't been growing is, a, it's expensive, but most importantly, because it's a very unpleasant experience. So we think -- we hope that it will grow now that we're introducing Niagen IV into the space, but it's mostly been targeting a very influential group -- the influencers, the biohackers, the celebrities and the athletes. But it hasn't been a market that's been growing. But one thing I will say is, right now, we're offering it as an infusion. Soon, we will be offering it also as an injection. And then we will be offering it as an at-home injection. And one market that has grown very substantially in the last couple of years is the GLP-1 market, where people inject these GLP-1 peptides at home. And that market become extremely popular, and it's our belief that people who want to stay thin also want to stay young. And we think that there is the potential for Niagen IV to gain popularity in that community of people who are already injecting themselves with Ozempic peptide products. And we think that has the potential to take off and become very popular once we offer these injection products, especially the at-home injection products. Another one final point is that one of the side effects to Ozempic is low energy. And as you know, elevating NAD with Niagen increases mitochondrial biogenesis and mitochondrial output, it increases cellular energy. So we think it also could be a complementary product in that regard. But again, we're being conservative with our projections. We just think that that's -- we're hopeful about that. We see the opportunity.
Sean McGowan: Very helpful. Thanks for addressing that. And my last question is regarding the reduction in spending. Would you characterize that delta from your previous guidance on where you thought spending would be? Is that delta entirely do to the timing of Niagen Plus? Or are there were reductions in other -- related to other reasons?
James Lee: Hi, this is James. Yes, we believe that most of the reduction is due to the shift in timing of the launches of the Niagen Plus. As explained before, we have forecasted a part of it or investment in the overall infrastructure related to Niagen Plus, including spend in regulatory, legal and other G&A activities to support the launch. So yes, we would characterize it as most of it is related to the shift in timing of Niagen Plus.
Sean McGowan: Okay, thank you very much. Appreciate it.
Rob Fried: Thanks, Sean.
Sean McGowan: Thanks.
Operator: I apologize and let me put him back again. Mr. McGowan, I apologize, you are back on the line.
Rob Fried: Mr. McGowan.
Mitch Pinheiro: Okay. I'll defer the floor. I'll yield the floor to Mitch if he's interested.
Rob Fried: Okay, okay. Dustin, I think we wanted to reconnect with Mitch, not Sean.
Operator: Understood. Just a minute, please.
Rob Fried: Sure.
Operator: Also we have another question here. The next question is coming back from the line of Bill Dezellem from Titan. Your line is once again open sir.
Bill Dezellem: Thank you. I feel it’s a great disappoint to hear that it's me instead of Mitch.
Rob Fried: Never. Not at all.
Bill Dezellem: Thank you. So you had mentioned in the Chinese market that the NMN players are significantly reduced and SinoPharm is optimistic. And I know that this has been a really long process. But does any of this somehow favor your green hat approval and change the outlook or opportunity for that?
Rob Fried: It's a very important question, but no. We're really having a difficult time getting to the Blue Hat approval process. There has not been an ingredient approved by the China FDA in many years. That's not from China. And we don't have an outlook on when we will be getting Blue Hat approval.
Bill Dezellem: Great. Thank you.
Operator: Thank you. And our next question comes from the line of Jeffrey Mark from Farmhouse Equity Research. The line is open.
Jeffrey Mark: Hi, Rob. Thanks for taking my call. And very quickly, just a quick question about the injectables. Do you know what -- approximately when you think you're going to be launching that product when that might be available?
Rob Fried: We will have an injectable product that's available at the clinics in just two or three months. When we have one that's an at-home product I'm just giving you a loose estimate, I'm going to say by the end of the year, but it might be the first quarter of next year.
Jeffrey Mark: Okay, sounds good. Thank you. Appreciate it.
Rob Fried: Sure.
Operator: Thank you. I apologize. The next question here comes from Howard Horberg from Horberg Enterprises. The line is open, sir.
Howard Horberg: Hey, Rob, just a quick question. I know it's a real focused on the Niagen DRIP. But with regards to Parkinson's, you tell me what the addressable market would be there if and when we get favorable results in 2025?
Rob Fried: So there's approximately $10 million diagnosed Parkinson's patients globally, and there is no drug approved for that. There's approximately 1 million in the United States. The majority of them are outside of the United States. The study that's being done on Parkinson's, as you know, is in Norway. It's being conducted by Dr. [Indiscernible], who is a world-renowned Parkinson's expert and it's being funded by the Norwegian government. And hope to be -- the last patient in that study was enrolled on May 1, so it's a four-year study, and that patient will be completed in May 1 of next year, then months after that, hopefully, they will tabulate the data. Hopefully, at that point, we'll see it and it will be positive, and it will take some months after that when they write up the manuscript and have it published. But if we don't look at it as a drug approval, if we just simply look at it as a dietary supplement opportunity in the United States. What -- the way we see it is that we now have a pharmaceutical grade pipeline because of IV. If we released a pharmaceutical-grade product on the market comparable to the one done in the study. And the study itself is positive. We think a good percentage of those global Parkinson's patients will seek out a safe dietary supplement from a very reputable trustworthy company that conducted the study. We think the addressable market there, if you -- if there's 10 million people globally, what percentage do you think would be interested in that dietary supplement if the study results are good. This is putting drug approval completely to the side. Just as a dietary supplement, if it's 5%, it's 500,000 people. And we all know people with Parkinson's. It's quite debilitating and heartbreaking. We understand that Parkinson's is a mitochondrial disorder, and we understand how Niagen and NAD help mitochondrial health, so we are optimistic that the Phase I clinicals have been published, which were mostly about safety, but the secondary endpoints were positive. We are cautiously optimistic. It's a blinded study. We have no idea. Obviously, if it's going to work or if it's not going to work. But we think that if it does work, there's a very, very dramatic, significant opportunity for us, even if we do not pursue drug approval, just as an opportunity to sell TRU Niagen pharma grade. I think you could do the math and you realize that the numbers are quite large. Yes, I appreciate you asking that question because if you take a step back and look at the ChromaDex business plan, we are very focused on making sure that we are cash flow positive and that we are responsible in managing our base business, but we are pursuing several initiatives, catalysts, if you will, all of which have the potential to be fairly significant, but you never know. The IV is one, Parkinson's is one, ataxia is another. If any of those hit well, it has a dramatic impact on the company. So what we are doing is just making sure that we're running a safe, stable, well-managed business that plays by the rules with excellent players that does things the right way, develops its intellectual property and grows, yes, it would be nice if we were growing slightly greater, and perhaps we could and perhaps we will but we are still growing, managing our cash flow and managing the business while we take these very, very dramatic shots on goal, only one of which has significant upside potential. Thank you for the question.
Howard Horberg: Thank you.
Operator: Thank you. And that concludes our question-and-answer session. I'll now turn the call back over to Ben Shamsian for closing remarks. Sir, please go ahead.
Ben Shamsian: Thank you, operator. There will be a replay of this call beginning at 7:30 p.m. Eastern Time today. The replay number is 1-800-770-2030 and the replay ID is 8584242. Thank you, everyone, for joining us today and for your continued support of ChromaDex.
Operator: This concludes today's conference call. You may now disconnect.
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